Near-Term Action - Innovative financing tool

SANDAG and Caltrans, along with a number of key local, state, and federal agencies in the United States and Mexico, are working aggressively to expedite the construction of an innovative port of entry in the San Diego-Baja California region with the objective of dramatically reducing border wait times. Insufficient capacity at existing border crossings in the region costs the United States and Mexico billions of dollars in foregone economic output each year. Hours-long delays are undermining productivity and industry competitiveness at the regional, state, and national levels.

The State Route (SR 11)/Otay Mesa East Port of Entry (POE) Project is employing several innovative financing and intelligent transportation system (ITS) tools to deliver border infrastructure that would provide fast, secure, and predictable crossings via tolled approach roads on both sides of the border. The tolled roads would seamlessly link a new state-of-the-art POE to the regional highway system. By applying variable tolling to the approach roads to the Otay Mesa East POE, the region aims to achieve the goal of operating the new crossing with an average 20-minute wait time while also generating sufficient revenues to finance most of the project.

In early 2020, the project sponsors will be finalizing an Innovation Analysis study, which will determine the POE size, operational innovations, and potential revenues that will be used to move into an investment-grade traffic and revenue study. This investment-grade traffic and revenue study is needed to assist the project partners in developing the financial strategy for the POE.

The tolls generated from the project will serve multiple purposes:

  1. Directly fund capital costs
  2. Serve as the basis for bond financing
  3. Attract and leverage unique initial funding
  4. Support a pilot financing approach that galvanizes interest and support from federal and state partners on both sides of the border
  5. Cost-effectively address regional goals of improved mobility, safety, a healthy environment, and economic prosperity.

Innovative hallmarks of the project include:

  • Building a “Smart Border” pilot by implementing Intelligent Transportation System (ITS) Technologies
  • Leveraging freight mobility resources from the States’ Trade Corridor Improvement Fund (TCIF) and Trade Corridor Enhancement Program (TCEP)
  • Positioning the project to apply for federal credit assistance through the Transportation Infrastructure Finance and Innovation Act (TIFIA)

Recent project milestones include:

  • In 2020, the California Transportation Commission awarded funds for the investment-grade traffic and revenue study and a northbound border wait times pilot project to complement the current southbound border wait-time system.
  • In 2019, construction began on the last segment of SR 11 and the SR 11/905/125 southbound connectors. In addition, all right-of-way for SR 11 and the Otay Mesa East POE has been secured.
  • In 2018, the U.S. Presidential Permit renewal was issued for the project.
  • In September 2018, Caltrans and SANDAG were awarded $82.5 in state funds (Trade Corridor Enhancement Program, or TCEP) for six interrelated border projects in San Diego and Imperial Counties. This funding will construct the remaining sections of the SR 11 roadway and develop a fiber-optic network and southbound border wait-time equipment to underpin the tolling and border wait-time system.
  • In August 2016, SANDAG and Caltrans secured a $49 million FASTLANE grant to cover construction costs on Segment 2 of SR 11, which will extend the highway another mile to the border. This funding will also cover the construction costs for the two southbound connectors linking SR 905, SR 125, and SR 11. 
  • Segment 1 of SR 11, from SR 905 east to Enrico Fermi Drive, opened in March 2016.
  • Construction of the northbound connectors began in October 2015 and opened to traffic in November 2016.